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Even with some recent flashes of good news about the prospective recovery of the economy, most HVAC contractors realize that it could be quite a long time before our industry returns to its past prosperity. The commercial building market probably still has its worst days ahead, and it could be years before the residential market returns to its past volume - if ever. But there are silver linings to all these dark clouds, and savvy HVAC contractors are weathering the storm by taking advantage of the new realities in today’s marketplace.

BETTER COMPETITION

Finally. Remember the days when you were shocked to learn that you lost a job to someone who came in below your cost? The good news is that many of those so-called “HVAC Professionals” that didn’t belong in the business in the first place will be shaken out by this recession. When things recover, the smarter contractors will still be around and the overall quality of our industry workmanship will be better for the customer.

R-22 PHASEOUT TO THE RESCUE!

The next step of the R-22 phaseout at the end of 2009 couldn’t have come at a better time for HVAC contractors. Things have been changing with R-22 and alternative refrigerants for a few years now, but this next phase is a real game-changer. (If you’re scratching your head over this comment, you can stop reading now. Please return to the first silver lining above for some self-reflection!)

TALENTED PEOPLE NOW AVAILABLE

There are some great people in this business that are either out of work or otherwise concerned about their current job situation. Now is the time to think about getting them on your team. That really talented guy in your area who wouldn’t have given you the time of day two years ago may now realize that your company is the place to be for the long haul.

Brian Hughes

THE SERVICE WORK JUGGERNAUT

As businesses and homeowners postpone retrofit and replacement projects, they have little choice but to put more money into existing equipment. Don’t lie awake at night worrying about the recent nosedive in your equipment sales numbers. Fill the gap by selling all the compressors and heat exchangers you can, even on old equipment that would normally be junked. The important thing is to keep that customer around so he’s there for you when times get better.

BETTER PRICING IS OUT THERE

Sure, customers are pressuring us from one end, but on the other end manufacturers and wholesalers are far more willing to negotiate discounts and payment terms. Your loyalty is important to your suppliers, and they will often stretch a little more to help you win a job or contract.

BOOMING TRADE SCHOOLS

Massive layoffs in many industries have caused a surge in vocational school enrollment as workers look to get retrained for a new career. When the economy starts recovering, there will be a bumper crop of entry-level candidates into the mechanical contracting business, and they’ll be a noticeable improvement from those slim pickings we saw earlier this decade.

NEW CUSTOMERS WAITING FOR YOUR CALL

In a recession, customers of all types are more likely to seek out better prices, new ideas, and second opinions. While this reality causes us to work harder and be protective of our current customers, it also gives us an opportunity to get in front of buyers who we never really had a chance with during those boom years. Now is the time to grow your customer list.

RUNNING A TIGHTER SHIP

During the good times, many HVAC contractors tolerated a little looseness with their expenses, leftover parts and equipment in the warehouse, a little extra unapplied time, plenty of leniencies with the truck usage. Sound familiar? Well, these days the cost of not being vigilant with even the smallest expenses is a real killer. In the long run, a tighter ship now will make for a stronger company later when this recession passes.

GREEN OPPORTUNITIES

Even in a recession, customers of all types have interest in green alternatives for their homes or businesses. This is especially true if it’s something that can save them money on their utility bill and doesn’t require a huge out-of-pocket expenditure upfront. HVAC contractors are in a unique position to capture a new marketplace. Even something as simple as explaining how a condenser cleaning helps cut the electric bill can earn you a customer for life.

Furthermore, there are far-reaching green initiatives brewing in the political arena that could trickle down and bring dramatic changes and opportunities to the HVAC trade. Regardless of where you may stand politically, it’s pretty clear that today’s elected officials in power are even more green, more progressive, and more determined to enact sweeping environmental legislation across all industries. Believe it or not, even our fairly recent friend, R-410a, is a possibility for phaseout.

Smart contractors know how to take advantage of these unique changes in today’s marketplace for the future benefit of their companies and their employees. When HVAC contractors look back on the Great Recession of 2009, we will be able to take pride in the decisions we made during the lean years and enjoy the rewards and successes that are certain to come.

Publication date: 03/01/2010

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Brian C. Hughes, LEED-AP, is vice president of Hughes Environmental Engineering Inc., in Montvale, N.J. He is a member of the Board of Managers of the Mechanical Service Contractors of America and a graduate of MCAA Advanced Leadership Institute.

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